The Climate Action Standards, Simplified

How companies should measure, plan, and act to keep global warming below 1.5 °C

Climate change is the defining challenge of our time, and business is both a driver of the crisis and a potential force for its repair. B Lab’s Climate Action Impact Topic challenges companies of all sizes to move from intention to implementation — whether that means publishing a public climate action plan and reporting on progress, or, for larger companies, quantifying full emissions inventories, setting credible targets, and developing transition plans aligned with a net-zero future.

The science is clear. Recent years have been the warmest on record, and the world is on track to exceed 2 °C of warming within this century unless emissions fall sharply. To keep warming below 1.5 °C, global greenhouse-gas emissions must decline 45% by 2030 (from 2010 levels) and reach net zero by 2050. The window is closing… and so is the public’s tolerance for delay and greenwashing.

Through these standards, B Lab calls on companies to lead where policy has stalled and to treat climate action as a core business function, not a campaign. For smaller companies, that means setting a public plan and demonstrating progress over time; for larger companies, it means backing commitments with measured results, verified data, and transition pathways that support a just and net-zero future.

Overview: The Three Core Climate Action Requirements

Climate Action defines how companies translate global climate goals into operational practice. The standards outline a clear sequence — measure emissions, commit to 1.5 °C and net zero, and demonstrate ongoing progress — scaled by company size, sector footprint, and maturity so that every business contributes in proportion to its influence.

Together, these requirements form a progression of accountability: measure → commit → act. Larger and higher-impact companies face heightened expectations for verification, disclosure, and stakeholder engagement. Smaller enterprises follow a different path: one that recognizes capacity constraints and avoids diverting limited resources into intensive data collection. Their role is to take tangible, meaningful climate actions and report on progress over time, without relying on precise GHG measurement.

CA1: Measure Greenhouse Gas (GHG) Emissions

Every plan for decarbonization begins with the same step: knowing what you emit. CA1 establishes that baseline. It requires larger companies to measure and disclose their greenhouse-gas emissions annually, creating the factual groundwork for credible targets and lasting reduction.

CA1.1. Measure and Disclose GHG Emissions

Who it applies to: Large, X Large, and XX Large companies (from Year 0)

What’s required:

• Maintain a documented process to measure direct (Scope 1), energy-related (Scope 2), and value-chain (Scope 3) emissions each year
• Use recognized accounting standards such as the GHG Protocol or ISO 14064–1:2018
• Record which Scope 3 categories are included or excluded and explain why
• Disclose total emissions publicly each year, showing both market-based (supplier-specific) and location-based (grid-average) results

Examples of compliance: Using a carbon-accounting platform that follows the GHG Protocol or ISO 14064–1:2018 and generates annual disclosures; working with an accredited consultant to calculate emissions and publish a verified inventory in a public report on the company’s website (e.g., annual report, sustainability report, integrated report). CDP publication may accompany but does not substitute for this requirement.

Why it matters: Measurement is the foundation of climate credibility. Without a clear record of what a company emits, every target is speculation. Public disclosure gives investors, workers, and communities the data to hold companies accountable, and to see whether their strategies are working.

CA1.2. Verify Emissions Through Independent Assurance

Who it applies to: Large, X Large, and XX Large companies (from Year 0)

What’s required:

• Have an accredited, independent third party verify your annual greenhouse-gas emissions data
• Begin verification in the fiscal year prior to certification and repeat it every year thereafter
• Ensure the verification covers direct (Scope 1), energy-related (Scope 2), and all relevant value-chain (Scope 3) emissions
• Confirm that your measurement methods follow accepted standards such as the GHG Protocol or ISO 14064–1:2018

Examples of compliance: Engaging an ISO 14064–3–accredited verifier to audit the full GHG inventory and provide an assurance statement; making that verification letter available in a public report on the company’s website (e.g., sustainability report, annual report) with a clear indication that the inventory has undergone third-party verification.

Why it matters: Independent verification builds trust. It shows that climate data has been tested (not taken on faith), and that a company’s reduction plans rest on facts strong enough to be checked. Reliable data lets leaders make decisions confidently and gives stakeholders proof that progress is real.

CA2: Commit to contribute to 1.5 °C and a Net-Zero future

Measuring impact is the baseline, but responsibility begins with reduction. CA2 sets that expectation: it requires every business to align its goals with the global effort to keep warming below 1.5 °C. Through public plans, science-based targets, and transition strategies backed by resources and oversight, companies move from knowing their impact to owning their path toward net zero.

CA2.1. Publish a Climate Action Plan

Who it applies to: Micro, Small, Medium, and companies without workers (from Year 0)

Smaller companies begin their climate journey here — with a clear, public plan that outlines how they will contribute to the global goal of limiting warming to 1.5 °C. Larger companies meet this same intent later through science-based targets (CA2.2) and transition planning (CA2.3).

What’s required:

• Make a climate action plan publicly accessible — either on your website or, if you don’t have one, through other channels such as digital or printed brochures, information sheets at physical locations, or partner-organization distribution
• Ensure the plan commits to supporting the global ambition to limit warming to 1.5 °C
• Include SMART targets (specific, measurable, achievable, relevant, and time-bound) for performance and impact
• Specify how human, technical, and material resources will be allocated to carry out the plan
• Describe how the company will engage and work with stakeholders
• Ensure the plan is approved by the highest governing body
• Update the plan every 36 months

Examples of compliance: Posting a downloadable “Climate Action Plan” on the company’s website that outlines SMART targets, resource allocation, stakeholder engagement, and includes a note documenting approval by the highest governing body; making printed copies of the plan available at a storefront or office so stakeholders can easily access clear targets, planned actions, and responsible teams; sharing the plan through a chamber of commerce, industry group, or partner-organization newsletter with a stable archive link included on a public-facing page.

Why it matters: A public plan is the first sign of climate accountability. It makes commitments visible to employees, investors, and communities, and turns climate goals from private intentions into shared expectations. For smaller companies, it establishes a foundation that can support deeper voluntary commitments — such as science-based targets or transition plans — if and when the organization chooses to pursue them.

CA2.2. Set Science-Based Targets

Who it applies to: Large, X Large, and XX Large companies (from Year 3)

What’s required:

• Establish GHG reduction targets aligned with a 1.5 °C pathway and the global goal of net zero by 2050
• Have targets validated by the Science Based Targets initiative (SBTi) or verified by an independent, accredited third party
• Include both near-term and long-term (net zero) targets covering Scopes 1, 2, and 3
• Record a clear baseline year and emissions data for each scope, showing how progress will be measured over time

Examples of compliance: Submitting targets to the Science Based Targets initiative (SBTi) and publishing the validation letter on the company’s website; including a one-page performance snapshot in the sustainability report comparing baseline and current emissions for Scopes 1–3.

Why it matters: Science-based targets anchor climate ambition in evidence. They show, numerically and transparently, how much and how quickly a company must decarbonize to stay within planetary limits. Setting these targets turns long-term pledges into measurable commitments, ensuring each company makes a just and proportionate contribution to the global net zero goal.

CA2.3. Develop a Climate Transition Plan

Who it applies to: Large, X Large, and XX Large companies (from Year 3)

What’s required:

• Create a formal, board-approved plan that outlines how the company will meet its near-term and net-zero science-based targets
• Include specific greenhouse-gas mitigation actions, clear roles and responsibilities, and an engagement plan for relevant stakeholders
• Provide a detailed resourcing plan that shows how targets will be funded and implemented
• Disclose the investment made in the last fiscal year to carry out the plan — both the total amount and the percentage of overall capital spend
• Explain how the company’s current or future business model supports achieving net-zero emissions
• Record evidence of credible removals or storage of residual emissions if the company has already reached net zero

Examples of compliance: Releasing a board-approved transition plan that details decarbonization actions, executive ownership, and capital allocation to climate initiatives; featuring a capital-allocation scorecard in the annual report showing total spend on renewable energy, efficiency upgrades, and value-chain engagement.

Why it matters: Targets without plans are promises waiting to fail. A transition plan proves intent by showing where the money, leadership, and responsibility sit. It makes climate action real by embedding it in budgets, jobs, and the design of the business itself.

CA2.4. Consult Workers and Stakeholders for a Just Transition

Who it applies to: Large, X Large, and XX Large companies in high-impact sectors (Wholesale/Retail, Agriculture/Growers, Manufacturing, Service with Significant Environmental Footprint) from Year 3

What’s required:

• Review the company’s climate transition plan to identify which stakeholders may be affected (positively or negatively) and which are most vulnerable to climate impacts
• Engage workers and value-chain partners, including suppliers, to review the plan and provide feedback
• Inform stakeholders about the plan, invite their input, and outline how the company will work with them to implement it
• Integrate feedback into the transition plan, adding concrete “just transition” actions where needed
• Allocate dedicated resources — financial and staff time — and set measurable targets for just-transition actions

Examples of compliance: Hosting workshops with workers and suppliers to identify transition risks and co-design mitigation strategies; collaborating with a social-impact firm to assess worker and community needs and codifying agreed-upon just-transition actions — such as reskilling programs or local resilience grants — into the plan.